THE Rs 139-crore housing project proposed by the Visakhapatnam Urban Development Authority (VUDA) at Madhurawada village on the outskirts of Visakhapatnam was given the green signal at a public hearing here on Tuesday evening.

Top 10 Firms including Satyam & Wipro account for 63% of total exports

Our Regional Bureau / Hyderabad May 07, 2005

Software exports from Andhra Pradesh in the fiscal ended March 31, 2005, has surpassed the expectations and touched Rs 8,270 crore ($1.88 billion), registering a remarkable growth of 64.5 per cent over the previous year. The hardware exports from the state accounted for Rs 40 crore.

“This growth rate is much higher than the growth rate achieved by other cities in the country. It is beyond our expectation. It signifies the global acceptance of Hyderabad as the preferred IT destination,” a jubilant B V Naidu, director of Hyderabad and Bangalore Software Technology Parks of India (STPI), told mediapersons here on Friday.

Naidu said that the top 10 companies in Andhra Pradesh, including Satyam, Wipro, Infosys, Microsoft and GE Capital, have accounted for 63 per cent of the total exports.

The software was predominantly exported to USA (64 per cent of the total exports) and Europe (25 per cent) while 11 per cent of the exports were made to Australia, Japan and other Asian countries.

“A high-profile delegation headed by the state legislative assembly speaker KR Suresh Reddy is visiting the US in July to meet with various semiconductor companies and IT, ITeS, pharma and automotive companies in association with the Information Technology of America Association (ITAA),”informed AP's IT and communications department secretary Ajay Sawhney.

The state's IT advisor and AP Invest CEO Dr C S Rao said that with the mega fab unit in the pipeline, the state hoped major companies would take note of the developments and make informed decisions.

Sawhney further added, “With the mega fab unit coming up in the next 15 months, we are also taking this opportunity of visiting the US to hold talks with various semiconductor companies and try attracting them to set up shop in Hyderabad. A fabrication unit will also have ancillary industries such as packaging, testing, assembling units, etc., and we are trying to hold meaningful talks with them.”

We want to develop a beach resort with international features which will be just around one-and-a-half hours drive from Chennai. Our idea is to package the resort with the Pulicat Lake, a famous bird sanctuary, so that the international tourists can have enjoy bird watching during their stay,” Reddy told Business Standard.

The corporation aims to tap the opportunities by locating the beach resort closer to Chennai which has international airport and is also an attractive destination for foreign tourists.

According to him, there is a clear need for a beach resort in the Chennai-Nellore seacoast stretch where no beaches have been developed so far. “At present, we find tourist beaches situated only south of Chennai. There is not a single beach for tourists towards north of Chennai

HYDERABAD: Having realised that correct political affiliation and hype are just not enough to attract investments, the Andhra Pradesh government is now focusing on creating attractive and reliable infrastructure facilities, like wide roads, 24x7 water supply, uninterrupted power supply, quicker connectivity and policing.
Though the realisation is a bit delayed, the government is pumping over Rn 500 crore on infrastructure on the ground. It is improving roads and connectivity infrastructure, like culverts, overbridges etc. linking the Shamshabad area (near the proposed international airport) where the government also wanted to establish the proposed Fab City. “The proposed greater Hyderabad, covering a range of 40 km, will also be developed with about 12 townships and industrial parks,” say officials. While these proposals have been on the drawing board for long, there are indications that a concrete shape may be given to them soon. According to officials, the government is expecting huge funds from the Centre and the World Bank towards development of urban infrastructure. Accordingly, Hyderabad will be developed as a model city in the next two to three years, taking lessons from problems faced by neighbouring Bangalore, which is bursting at its seams.

The government has taken up road widening on a war-footing on important roads, like the Rajbhavan Road, Banjara Hills and Jubilee Hills, which connects the airport to Hitec City and beyond where most of IT, ITeS companies are coming up.

A committee comprising heads has been set up of all departments concerned to improve traffic management and deal with traffic law-breakers. A similar exercise is being carried out in Visakhapatnam and Kakinada sectors focusing more on promotion of port-based activities, like chemical complex, oil and petroleum complex, pharmaceutical hub and SEZs for garments, leather and textile products.

According to business analysts, the overall development of urban infrastructure by identifying the opportune locations for industrial clusters, both for domestic and exports, is a multi-pronged strategy. The government is, therefore, looking at both domestic and foreign investment and offering reasonable incentives. On the other hand, it also bringing pressure on the Centre not to interfere with the marketing strategies of states. In one such move, the Prime Minister was appraised by chief minister YS Rajasekhara Reddy on the pressure tactics by Tamil Nadu to take away the Fab City project. AP is now preparing to stall West Bengal’s plan to take away the Kakinada Chemical Complex project to Haldia.

This apart, the government has also made a representation for removal of additional benefits being offered to companies by Uttaranchal and north-eastern states, as a result of which pharma companies are moving to Uttaranchal. Though the industry claims that only formulation units are establishing heir units there for additional capacity, AP is not ready to lose even that.

“The newly developed Jawaharlal Nehru Pharma City in Visakhapatnam is the first victim, as pharma majors like Dr Reddy’s are establishing formulation units in Uttaranchal,” officials say. “We have already stabilised as a IT & BPO destination in country. Now the focus is on making the state attractive even for manufacturing,” officials added.

THE Andhra Pradesh Government has decided to develop two hillocks (roughly 100 acres) allotted to the IT companies at Madhurawada village, overlooking the Bay of Bengal, as special economic zones.

At a press meet here on Saturday evening after a review meeting, Ms K. Ratnaprabha, IT Secretary, said that so far 14 companies had been allotted 59 acres on the two hillocks and ten more companies had applied for land.

"The Visakhapatnam Urban Development Authority is developing the infrastructure and it has been decided to secure SEZ status to benefit the units," she said.

She said land had been allotted to major companies such as HSBC, Satyam Computers, Wipro and TCS here at other places.

"The HSBC call centre is functioning. Satyam has already started work and other companies will also start operations. We have ambitious plans to develop Vizag as the number one among the two-tier cities for IT companies," she said.

An IT incubation centre was also being set up here for the first generation entrepreneurs, she said.

"At present, Vizag accounts for software exports of Rs 70 crore and we have plans to increase it ten-fold by 2009," she added.

Andhra Pradesh may have been successful in attracting the attention of big corporates like Reliance in the non-IT sectors but it has to wait for at least three more years to see the flow of investments as in states like Gujarat and Maharashtra.

Though the gas production by Reliance and GSPC in KG Basin, which may commence in the second half of 2008, is expected to give the much-needed fillip to industrialisation in the state, other mega projects may go beyond 2008 to reach a decisive stage of implementation.

Even as about Rs 73,783 crore worth of investment proposals are in the pipeline, including mega projects worth about Rs 42,201 crore, only 47 proposals, worth Rs 10,608 crore, are actually under active implementation.

These projects are expected to commence production within 2-3 years’ time, according to a recent report prepared by the industries department. Of this, the expansion of Vizag Steel plant alone accounts for an investment of more than Rs 6,000 crore.

Of the 47 proposals, only 16 are of the size of more than Rs 100 crore worth of investments. The remaining are in the range of Rs 25 crore to Rs 100 crore investments.

As far as mega projects are concerned, there is a list of 12 proposals with investments ranging from Rs 125 crore to Rs 18,000 crore on the table but most of them, even if they conclude by the early financial closure, would see the light of the day only by 2009-2010.

HPCL’s greenfield petrochemical complex proposal tops the list in terms of investment with an estimated Rs 18,000 crore in addition to the expansion of the existing refinery at Vizag at an estimated cost of Rs 1,635 crore.

At present, the steel and ferro alloy industry is the leading sector in the state followed by bulk drugs and chemicals, and non-metallic minerals like cement in terms of investment.

The year-wise investment proposals received by the state industries department also indicate that the real break is yet to come in the manufacturing and other non-IT sectors in terms of size of investments.

During 2004-05, a total 75 projects with an investment of Rs 1,811 crore went into production. This is much lower as compared to 2001-02 when over 105 projects with Rs 2,240 crore investment went into production.

Till November, 2005, only 44 proposals involving Rs 494 crore investment have gone into production, according to the industries department. So far, 256 proposals with Rs 4,380 crore investment have been received during the current year.
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Only 47 proposals worth Rs 10,608 crore are under active implementation A list of 12 proposals with investments ranging from Rs 125 crore to Rs 18,000 crore is on the table
The real break is yet to come in the manufacturing & other non-IT sectors in terms of size of investments

Andhra Pradesh Chief Minister Y S Rajasekhara Reddy today thanked Prime Minister Manmohan Singh for making a massive plan allocation of Rs 15,650 crore to the State.
''This allocation is highest in the country and much higher than the one given to bigger states like Uttar Pradesh and Bihar and to the developed Maharashtra'', Dr Reddy said with satisfaction while taking part in the function to lay the foundation stone for the Outer Ring Road.

The Chief Minister sought all support from Dr Singh making the State number one in the country.

He also thanked him for starting the National Employment Guarantee scheme, under which employment would be provided for 100 days to the landless poor in 13 districts in the state.

Governor Sushilkumar Shinde said he had been witnessing the progress of the state for the last one year.

He wanted planners to concentrate on preparing a blueprint for development of the state for the next 50 years with focus on both, urban and rural areas.

Referring to death of children straying into national highways, he said development of service roads was a must.

Some 600 VOs chosen for financial assistance from 1,700 village organisations
Record amount of money for village organisations
Guidelines sought for implementation of new scheme
Bankers urged to take steps for the success of new credit plan

HYDERABAD: The German auto major Volkswagen has given fresh hopes to the State Government on the car project.

After inspecting the 300-acre site on Monday at Aganampudi at Visakhapatnam offered by the State Government for the car project, a five-member team of the company held daylong parleys at Hotel Taj Krishna here today with officials of the Industries Department. The team was led by Peter Walter, head of India Project, and Frank Elbe, former German Ambassador to India.

Details of the visit were kept a secret at the instance of the company. The team left for New Delhi after the talks.

However, a senior official later told The Hindu that the discussions had raised hopes about the project. "If the company is not interested in Andhra Pradesh, why should the Volkswagen team pay a visit within two months of earlier one to Tada in Nellore district ?" he asked. He said the talks were inconclusive with the German team not clearly indicating "yes" or "no" about the project. Frank Elbe was brought specially to defuse the difficult situation, if any, during the discussions.

According to sources, the discussions centred not around the sites offered at Visakhapatnam and Tada, but mainly on the likely concessions and incentives by the Government. The German team was keen this time to know the possible impact of VAT, which was introduced all over the country, on the project. Apart from reiterating the plea for reduced tariff for electricity and water supply, the German team sought clarifications on Central Excise.

The Government team was led by Principal Secretary, Industries, Lakshmi Parthasarathy.

Hyderabad, Jan 12: Suryalata Spinning Mills Limited has embarked on a Rs 126-crore expansion of its weaving and processing facilities in Andhra Pradesh and Maharashtra, aiming to become an integrated player to leverage the emerging opportunities in the free trade regime.

Under the expansion scheme the company will increase its capacity by 45,000 spindles at a cost of Rs 91 crore and set up weaving and processing units at a cost of Rs 35 crore with 50,000-metre a day capacity at its facility in Kalwakurthy in Andhra Pradesh and Ramtek in Maharashtra.

Hyderabad: The Andhra Pradesh Cabinet today gave its approval for alienation of 314.57 acre to Singapore-based Apache Investment Holdings Pte Ltd, an exclusive supplier of footwear to Adidas for setting up Special Economic Zone (SEZ) for footwear near Tada in Nellore district at a total investment of Rs 500 crore.

Briefing newspersons after a Cabinet meeting here, Information Minister Md Ali Shabeer said Apache would make an initial investment of Rs 200 crore at Mambattu in the district and the project was expected to create jobs 3000 to 7000 jobs by the year-end.

An MoU had been signed with Apache which had strong presence in many countries, including the USA and China.

Arun Mahindra, executive director of Mahindra & Mahindra Limited (M&M), met chief minister Y S Rajasekhara Reddy today to seek the government’s support for the infrastructural requirements for their proposed unit to manufacture trucks and buses in the state.

Apart from a couple of locations in other states, Zahirabad in Andhra Pradesh is on the company radar to set up its new plant. At Zahirabad, M&M has a manufacturing plant that produces tractors and semi-utility vehicles (SUVs).

According to highly placed sources, the company is expected to make the announcement on the project location within a week or two. Sources close to the development said that chief minister Rajasekhara Reddy, while promising to provide all the necessary support, suggested to the company representative to go ahead with the announcement in favour of the state.

“Leave all that to me, and make the announcement in our favour,” was said to be the parting remark of the chief minister during the 15-minute meeting.

The state had missed the bus by not acting in time on the requests of M&M for water supply when it came forward to locate Logan car unit at Zahirabad.

This time around, the same water issue, apart from the request for four-laning of the Hyderabad-Zahirabad road, is said to have come up for discussion during Arun’s meeting with the chief minister. The company delegation sought a letter from the Andhra Pradesh government to this effect, the sources said.

M&M delegation also visited a couple of other places, including the one at the new international airport for the purpose.

Andhra steals march over TN

Our Regional Bureau / Hyderabad January 18, 2006

Chief minister Y S Rajasekhara Reddy is expected to lay the foundation stone for the Adidas shoe manufacturing facility on February 25, 2005, marking the quickest-ever processing of an application for any private project by the government.

The unit is being set up by Singapore-based Apache Investment Holdings Private Limited at Mambattu in Tada mandal of Nellore district

Pulling a last minute surprise on Tamil Nadu, which was the prime contender for the Rs 500-crore investment from Apache, the Andhra Pradesh government signed an MoU with the company in the first week of this month providing over 315 acres of land besides other facilities required for setting up of the project.

“We are working to complete all the formalities, besides securing the SEZ status for the project well within the time to enable the company to go ahead with the foundation laying ceremony on February 25,” a senior government official told Business Standard.

Besides offering the land free, the government has also agreed to pay Rs 12,000 per person towards training requirements. The 2-million capacity shoe manufacturing plant is expected to provide employment to 30,000 workers.

Oracle India Private Limited has signed a memorandum of understanding (MoU) with the Institute for Electronic Governance (IEG), according to which Oracle will provide software grants worth more than $114 million to 60 Jawahar Knowledge Centres (JKC) in Andhra Pradesh.

This increases the in-kind value of Oracle’s total software grants to educational institutions in India to over $250 million.

Jawahar Knowledge Centres, an initiative of the IEG, have been set up at 50 engineering colleges across the state to develop quality manpower for the IT sector. These centres provide technical and soft skills to the students. Around 42 companies like Satyam, HSBC and Microsoft have already partnered with IEG in this regard.

Addressing the media on Wednesday, Krishan Dhawan, managing director of Oracle India, said, “There is a need to bridge the gap between the skills that the students are trained in and the requirements of the industry. The Oracle database is an industry standard and as a $12-billion company, we support a global ecosystem worth $120 billion. In India itself, there are 6,400 companies and government departments that run their business on the Oracle platform. Our academic initiative will enable students to enter the job market more confidently.”

The 8,600-strong company hires around 300 students from campus every year. The company will be touching the 10,000-mark by the end of December 2006.

Under the MoU, Oracle will grant software licenses for Oracle10g Database, Oracle10g Application server and Oracle10g developer Suite, and provide faculty training to the network of JKCs across Andhra Pradesh.

This takes the total number of higher educational institutions that will be covered under the Oracle Academic Initiative to 150 in India.

According to Subba Rao Ganta, president of IEG, around 2,000 engineering students and 1,100 degree students will be benefited directly through this initiative.

“We plan to start JKCs in 11 degree colleges this year. There are plans for taking this initiative to schools and intermediate colleges too.” Around Rs 9 crore is spent annually on the salaries of the 800 people working for JKCs.

Meanwhile, Ratna Prabha, secretary, IT and communications, said that the government had a long-term measure of revamping the syllabus at engineering colleges.

Hyderabad: The pharmaceuticals industry in Andhra Pradesh is up in arms over the government's move to purchase antibiotics only from public sector drug manufacturers, instead of through the market, using the open tender route.

According to the Organisation of Pharmaceutical Manufacturers, which represents the small-scale pharmaceutical industry, the government buys antibiotics of nearly Rs 30 crores for distribution to patient at government-owned hospitals.

"These medicines were bought through open tender, and PSUs were also invited to bid for the government contracts. This despite the fact that there is no government-owned drug manufacturing company in Andhra Pradesh, with Indian Drugs and Pharmaceuticals Ltd having shut down its production many years ago. Pharmaceutical PSUs from other states were allowed to bid," says an industry source, who is closely associated with the development.

But, according to the source, the finance department issued a circular recently directing government hospitals to buy the antibiotics only from PSUs. "This move has come as a major blow to the pharmaceuticals industry, particularly the small and medium scale units. Pharmaceutical PSUs in Karnataka, Tamil Nadu and other states have been routing the antibiotics through distributors," the sources said.

"The monopoly of allowing only PSUs to supply antibiotics has been misused by them through the formation of a cartel, raising the price of antibiotics," the OPM said in a letter to the government.

"The policy intended the PSUs to supply the antibiotics directly to hospitals, but they are instead being routed through distributors. These distributors are purchasing the antibiotics at very low rates from the PSUs and supplying them to the government hospitals at the rate contracts offered by the PSUs," the letter said.

"The government's directive on purchasing antibiotics only from PSUs violates an Andhra Pradesh high court order," sources said.

Hyderabad: The Income Tax Department today collected an amount of Rs 4,294 crore tax at the end of December in the current financial year against last year's collection of Rs 3,018 crore in Andhra Pradesh.

Andhra Pradesh has set a target of Rs 6,401 crore tax collection for the current financial and an around 67 per cent of the total targeted amount has already been collected, said Hyderabad Chief Commissioner of Income Tax-I D V Dharmik said in a relase here.

Based on the information from six lakh pieces of information from various sources like Banks, Cell Phone coampanies, hotels, Stock Exchanges, sub-registrars and transport authorities, the Chief Commissioner said notices were being issued to 15,000 individuals, who have spent or invested unaccounted income of Rs five-lakh or more each.

As per the analysis showed that these individuals do not have Permanent Account Numbers(PANs) and have not filed their income tax returns and would take up further action against them, he explained.

Asked about the collection of newly imposed Fringe Benefit Tax (FBT), Mr Dharmik said an amount of Rs 36 crore was collected as FBT from employers in the State till the end of December.

He also said as many as 48 raids were conducted on tax evaders and recovered an amount of Rs 23 crore in the current financial year, the release added.

Czechoslovakia’s Skoda Export Company Limited is back after a gap of decades with a Rs 10,000 crore investment proposal, which involves setting up of a port-based industrial city project in the state.

The company is credited with the establishment of Navratnas like BHEL and Visakhapatnam Steel Plant by providing technology for the turbo generator set manufacturing facility and the steel-rolling mill in Andhra Pradesh.

Czechoslovakian Prime Minister Jiri Paroubek, who was in Hyderabad, met chief minister Y S Rajasekhara Reddy on Thursday. His short trip, in fact, amplified the significance of the investment proposed by Skoda Export at Nizampatnam, a minor port in Guntur district.

With the ground work for a possible MoU ready, Skoda Export Company’s chairman and chief executive J Hubacek, who led the business delegation that accompanied the Czech premier, gave a presentation of the project.

The company proposes to establish a port-based multi-product special economic zone (SEZ) at Nizampatnam, which will include a urea plant, a 1,000-megawatt thermal power plant and an LNG terminal with the collaboration of a local oil company, according to Anish Reddy, director, Skoda (India) Private Limited.

Skoda Export Company acts as an EPC (engineer-procure-construct) contractor for investment capital projects like thermal and hydro power stations, chemical plants, metallurgy plants among others. Volkswagen’s Skoda Auto division was originally with Skoda Export before it was sold to the German car major.

The company’s selection of Nizampatnam port, which so far has no significant operations, is a result of an evolution of its initial proposal of setting up of a thermal power plant in the coal-rich Sattupally in Khammam district.

“Initially, I lobbied with the company just to get investments to my constituency. But later, I was convinced of its keenness to take up a much bigger project for the state and worked for its realisation,” Jalagam Venkat Rao, Sattupally MLA, and son of former chief minister late Jalagam Vengala Rao, told Business Standard.

Anish Reddy termed the selection of Nizampatnam as a wise choice. “Nizampatnam is more economical for exporters of iron ore, granite, cement among other products,” he said.

Once both the governments enter into a formal understanding, a detailed project report along with the possible local collaboration is expected to be finalised. According to Anish Reddy, the company wants to start the work on the project within a year’s time.

The state government is expected to sign the MoU with Skoda Export Company sometime next month when the Czechoslovakia Republic’s industries and commerce minister visits Hyderabad.

The state government is also keen to convince Tatra, the Czechoslovakian auto company, which produces a wide range of heavy-duty off-road trucks, to set up its unit in the state, Anish Reddy said.

Proposal to construct an international leather park at Krishnapatnam in Nellore district has been cleared by Andhra Pradesh Chief Minister, Y S Rajasekhara Reddy.

Planning Commission and the Union Government had already cleared the project.

The project would receive funding worth Rs29 crore from the centre and balance Rs164 crore would be raised by the developer.

Proposal to develop 37 acres of land at Darga Hussain Shah Wali for Leather Industries Development Corporation of Andhra Pradesh, establishing of Indo-German Institute of Advanced Technology at Visakhapatnam, and an Aero Space Park near Hyderabad was also cleared by the Chief Minister.

i've no news about the Indo-German Institute of Advanced Technology. does anybody have any clue?